Use the Information for the Question(s)below

question 104

Multiple Choice

Use the information for the question(s) below.
Consider an economy with two types of firms,S and I.S firms always move together,but I firms move independently of each other.For both types of firms there is a 70% probability that the firm will have a 20% return and a 30% probability that the firm will have a -30% return.
-The standard deviation for the return on a portfolio of 20 type I firms is closest to:

• A)5.25%
• B)15.0%
• C)5.10%
• D)23.0%

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Definitions:

Fraternal Twins

Twins born from two separate eggs fertilized by two different sperm cells, resulting in siblings that are genetically distinct.

Dizygotic

Referring to twins that are the result of two separate eggs fertilized by two separate sperm, resulting in genetically distinct siblings born at the same time.

Monozygotic

Another term for identical twins, indicating they originated from a single zygote.

Chromosomes

Structures within cells that contain the organism's genetic material (DNA) and are responsible for determining the characteristics of an organism.